7 Things I Wish I Knew When I Was Just Starting Crypto Trading

In this post, I have compiled several things that I wish I had known earlier as these things do help in investing. I hope as you read this post, you get more knowledge as you handle your trades and investments.

1) Prices of Bitcoin and altcoins move in opposite (most of the time)

This trend is generally true for most of the time bitcoin’s price rises rapidly. Now this can be both good and bad for your investments. It can be good mainly due to the prices of altcoins dropping and you can buy a lot more. It’s more like everything’s on sale. Prices of coins generally ignore technical analysis and chart reading during this phase. But not always. However, it can be bad especially if a huge portion of your portfolio is in altcoins. This massive dumping would lead to lower prices as people want to ride in the massive pump of BTC.

Altcoins do well when BTC drops or in consolidation phases.

2) I wish I had a portion of my portfolio in BTC and not all-in for altcoins

Don’t put all your eggs in one basket. As discussed earlier, BTC price moves inversely with altcoins. And what better way to load up with your beloved altcoins than in a flash sale? A reserved BTC supply is perfect for this kind of scenario! This will also give you stability as altcoins are more volatile than BTC.

3) Have a trading plan

Whether you’re going for day trading or long-term HODL-ing, decide before buying. By having a plan, you know when to buy, and what your entry and exit points are. This prevents you from selling too late. You might never know, one day you’re having 50% gains, and the next day it could be 30% loss. Consistent gains are key. Guarding your downsides will make you rich!

4) Basic Technical Analysis

To be able to make a great trading plan, you’ll need to know even the basics of technical analysis, support and resistance levels, relative strength index, moving averages, etc. These analyses will give you the ability to know when to enter and exit a market. Reversal patterns are also a must to study! This will increase the chance to determine possible shifts from a bullish market to a bearish, and vice versa.

5) Be updated

Buy the rumor, sell the news. This has been one of the most commonly used phrases in the crypto community. News has a great impact on the performance of coins in the market. Positive news brings an increase in prices, negative news is preceded by bearish trends. As always, news and stories can be easily manipulated. Always keep in mind to check for the accuracy of the news and DO YOUR RESEARCH. News regarding coins can be found on coinmarketcal.com. What I usually buy for my short-term trades (days to weeks) are those that have an event in the coming weeks. You can get lower prices if you don’t buy during pumps and trips to the moon, hence having better profits!

6) When the target is reached, sell a portion if not all

This, in all honesty, has been one of my flaws ever since. My greediness has been the main reason why I haven’t done remarkably well. I could have saved $200 worth of profit had I just sold a portion and just bought back later on a dip. Technical analysis can be really helpful in times like this, most especially the RSI. When you have established a target, sell. Still expect the coin to do well shortly, just buy back on dips. If you’re an investor and HODL-ing coins for the long term, go ahead and just disregard this.

7) A low total coin supply will most likely be more valuable

The top 3 coins in terms of price are BTC, BCH, and DASH. What do these coins have in common? Limited, and low supply. Bitcoin has a maximum supply of 21 million. Bitcoin Cash also has 21 million. Dash has 19.8 million units. When choosing a coin, make it a point to look at the total supply. The law of supply and demand is also applicable in cryptocurrencies. A scarcer supply will generate higher value.

I hope you have learned from this post. My goal is that we all get to the moon together! Keep in touch as I post more things for anyone who wants to do great in this field. As always, watch your downsides and invest based on knowledge, not with emotions!